AVERAGES – are the expenses or losses that are incurred during
the navigation for the PRESERVATION OF THE VESSEL OR CARGO.
2 KINDS OF AVERAGES:
1. General or Gross Averages – these are EXTRAORDINARY
OR ACCIDENTAL EXPENSES for the preservation of the
vessel or cargo or both.
 Deliberate damages
 All of the persons who having an interest in the
vessel and cargo at the time of the occurrence of
the average shall contribute to satisfy the average.
 All of the parties in a sea venture share
proportionally any losses resulting from the
voluntary sacrifice because the vessel and the cargo
are exposed to a common danger and IN ORDER TO
SAVE THE VESSEL AND CARGO there must be a
VOLUNTARY SACRIFICE OF PART OF THE SHIP OR
CARGO.
 There must be a voluntary sacrifice because the
vessel and cargo are EXPOSED TO COMMON
DANGER and in order to save the vessel and cargo
there must be a DELIBERATE SACRIFICE MADE.
 Some cargos will be jettisoned and some portion of
the vessel will be jettisoned in order to lighten the
vessel. Because of this those whose cargo were
saved because of the jettison will have to share
proportionately their interest to the general average
in order to COMPENSATE THOSE CARGO OR VESSEL
THAT WERE JETTISONED.
NOTE: All persons who were benefited from the sacrifice shall
be liable to contribute to the general average in proportion to the
value of their property saved.
Ex. . Those with higher interest will pay more than those who
have lesser interest. But PROPORTIONATELY to the value of their
respective cargoes that were saved.
 Owner of the cargos who were sacrificed shall be entitled
to indemnity but not all goods are to be indemnified.
What are goods not covered?
1. Goods that are carried on deck
2. Goods that are not recorded in the books or
recourse of the vessel
3. prohibited under YORK ANTHWERP RULE
2. Simple or Particular Averages – EXPENSES or DAMAGES
caused to the vessel and to her cargo or cargo which
have not redound to the benefit or profit of the persons
interested in the vessel and cargo.
- Shipowner shall bear the average I it pertains to
the vessel
- Shipper bear the average of the goods which gave
rise to the expenses suffered.
JURISPRUDENCE ON LIABILITIES:
A. The SC rejected the argument of the ship agent that
there was general average because its cargo was
agricultural machinery. The agricultural machinery was
not a contraband and was not subject to seizure or
forfeiture even if the ship will be captured.
B. Supreme Court here ruled that there was no general
average because the French cargo absolutely secured
from the danger of seizure of confiscation as long as it
remained in the port of Saigon and there can be no
question that the flight of the vessel was a measure of
precaution adopted solely for the purpose for the
preservation of the vessel from the danger of seizure
and capture. Expenses for the refuge in Manila cannot
be considered as a general average but only a simple
and particular average because it inured only to the
benefit of the shipowner. no common danger if the
measure was undertaken against a distant peril (distant
meaning it is not yet imminent) again it will not apply if
the danger is not yet imminent. Even if there is a
common peril the same may not justify a voluntary
sacrifice if the same can easily be avoided by the ship
without such sacrifice.
C. the law on averages will not apply in collision cases
where the collision was caused by the negligence of the
captains of the colliding vessels and the cargos were not
jettisoned to save some of the cargos and the vessel
D. Expenses to refloat vessel which ran aground a shall
river in order to continue voyage, was not deemed as
general average because there was no common danger
nor there was deliberate sacrifice required to save the
vessel, in addition the cargoes were not in the imminent
peril thus cargo owners are not required to contribute.
What makes this different from Loans on respondentia?
1. The collateral shall be the cargo.
2. The lender shall bear the loss in proportion to his
interest.
3. If the cargo is lost then the lender will no longer be paid.
4. If the cargo was saved the buyer shall pay the loan
NOTE: It is automatic that if it is not considered as a general
average it is a particular average.
Petty and ordinary expenses – these are port expenses, costs
of barges and unloading, until the merchandise is placed on the
wharf and any other expenses common to navigation shall be
considered ordinary expenses TO BE DEFRATED BY THE
SHIPOWNE unless there is a special agreement to the contrary.
- administrative and operational expenses of the
common carrier.
Pilotage of coasts and ports - licensed pilots are employed
by pilotage services providers to guide ships into and out of
port waters.
Lighterage -  process of transferring cargo between vessels of
different sizes
Anchorage dues - a place where vessels anchor
Lazaretto - a quarantine station for maritime travellers
REQUISITES OF GENERAL AVERAGES:
1. There must be COMMON DANGER to which the SHIP,
CARGO, ITS CREW ARE ALL EXPOSED TO THE DANGER
and that the danger must be imminent and inevitable.
 The ship and cargo are subject to the same
danger after it has been loaded during the
voyage or at the port of loading and unloading
 Danger pertains to the sea, Arises from the
accidents of the sea, or Disposition of
authority.
2. For the common safety of part of the vessel or the
cargo or both it must be SACRIFICED DELIBERATELY.
 Involves voluntary jettison or throwing away of
some portion of the cargo.
 Does not involve a damage which was beyond
the control of the captain and crew without any
intention on their part. Again this emphasizes
that the sacrifice must be made through the
jettison of the cargo or part of the ship.
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 3. From the expenses or damages caused follows the
SUCCESSFUL SAVING of the vessel and cargo
 Following the jettison, there must be the
successful sailing of the vessel and cargo.
4. That the expenses and damages incurred should have
inflicted after taking proper LEGAL STEPS AND
AUTHORITY provided under Art. 813 and 814:
PROCEDURES
a. RESOLUTION OF THE CAPTAIN ADOPTED after
deliberation with the officers of the vessel and
hearing all persons interested in the cargo. If the
persons disagree, the captain’s decision shall
prevail but the persons who objected shall register
their objections.
b. The resolution must be ENTERED INTO THE
LOGBOOK OF THE VESSEL stating the reasons of
the dissent and the irresistible and urgent process if
he acted in his own accord.
c. If there are no oppositions – ALL PERSONS
PRESENT IN THE MEETING MUST SIGN.
If there are oppositions – ONLY THE CAPTAIN AND
THE CREWS WILL SIGN.
There must be minutes which contain a detail of
all of the goods jettisoned and of those injuries
caused to those on board.
HIGHLIGHTED CASE: MAGSAYSAY INC. VS AGAN
SS Atonio owned by Magsaysay was carrying various cargoes, one
of which was owned by Anastacio Agan. One fine weather day, it
accidentally ran aground the mouth of the Cagayan River due to
the sudden shifting of the sands below.
SS San Antonio then needed the services of Luzon Stevedoring
Co. to tow the ship and make it afloat so that it can continue its
journey. Cargoes were delivered to their respective owners, who
with the exception of Agan, made a deposit or signed a bond to
answer for their contribution to the average.
, AMInc required the cargo owners to pay the expenses incurred
in making the ship afloat (P841.40 each). In the theory that the
expenses incurred in the vessel, as AMInc claims, fall under the
General Averages Rule.
General averages contemplate that the stranding of the vessel is
intentionally done in order to save the vessel itself from a certain
and imminent danger. Here, the stranding was accidental and it
was made afloat for the purpose of saving the voyage and not the
vessel.
The towing was not made to save the cargos, for the cargos were
not in imminent danger.
All of the requisites to be considered as a general average
were not followed:
1st requisite: the court said "it is a common danger.". Evidence
do not show that the expenses incurred was to save the vessel,
and cargo from the common danger. The vessel was aground in
fine weather, inside the port of the mouth of the river, which was
a place which is described as very shallow. The vessel was not to
be afloat in order to save it from imminent danger. The Refloating
of the vessel was not to save it from imminent danger, but to
enable the vessel to proceed to its port of destination.
2nd requisite: the expenses was not incurred for the common
safety, but only for the benefit of the vessel/ship owner.
3rd requisite: the salvage operation was a success. But, to enable
it to proceed to its destination.
YORK-ATWERP RULES:
An international system of rules for liquidation and payment of
average to avoid problem of characterization. This refers to a
situation with respect to loading cargoes on deck because
in international overseas trade, cargoes on deck are not
allowed for the cargoes be exposed to risk.
Allows deck cargo on coast wide shipping and prohibit the same
on overseas traffic or shipping. Why?
1. the cargo is exposed to the weather to the peril of the
sea
2. duration of the travel is longer, sometimes weeks before
it reaches the place of destination.
Compare it to an interisland or coastwise:
1. travel is shorter, and therefore it is allowed by the
customs of the port in the port of destination, where it
allows deck cargo
Therefore, if it is an overseas shipping, deck cargo is
prohibited but in coastwise or interisland shipping, it is
allowed.
EXAMPLE: X loads 50 cans of kerosene of a vessel bound for
Tacloban. It was loaded on deck. On the way to Tacloban, the
ship met a typhoon and the captain ordered the jettison of the
kerosene. In order to make the vessel lighter, the cans were
thrown and as a result of the jettison, the vessel arrived safely.  
X as the owner of the kerosene demanded reimbursement. Is X
entitled to reimbursement? 
Since this is interisland or coastwise, under the YA rules, the deck
cargo is allowed. The cargo on deck is jettisoned as a result of
which the vessel was saved, the cargo owner is entitled to
reimbursement, if the cargo is saved, the cargo owner must
contribute to the general average. However, if it is a case of
overseas trade, the YA rules prohibit cargo on deck or even
container. In case such cargo is jettisoned, the owner thereof will
not be entitled to reimbursement in view of the violation. If the
cargo was saved, the owner must contribute to the general
average.
THE CAPTAIN SHALL SUPERVISE THE JETTISON BASED ON
THE FOLLOWING ORDER (ART. 815)
Those that are ON DECK – beginning with those which
embarrass
[obstructs] the handling of the vessel or damage her, preferring if
possible, the heaviest ones and those of lease utility and value.
Those that are IN THE HOLD (A ship's hold or cargo hold is a
space for carrying cargo in the ship's compartment.) -
beginning with those of greatest weight and
smallest value to the amount and number absolutely
indispensable.
NOTE: If you want to claim, you have to show proof that your
cargo was loaded on board, with respect to the shipowner there
must be an inventory of the equipment of the ship .The existence
of cargoes onboard the vessel must be proved by the BILL OF
LADING and as to the goods belonging to the vessel. Their
existence must be proved by an INVENTORY made prior to
departure.
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HIGHLIGHT CASE: PHILIPPINE HOME ASSURANCE
CORPORATION VS EASTERN SHIPPING LINES
Fire may not be considered a natural disaster or calamity since it
almost always arises from some act of man or by human means.
It cannot be an act of God unless caused by lightning or a natural
disaster or casualty not attributable to human agency. Thus, in
this case, the fire causing the damage cannot be considered a
natural calamity, as contended by ESLI and as held by the lower
courts, that would exonerate the former from liability. In fact, the
explosion causing the fire was due to the negligence of ESLI’s
crew
General or gross averages include all damages and expenses
which are deliberately caused in order to save the vessel, its
cargo, or both at the same time, from a real and known risk. the
consignees will be required to contribute to the cost of saving the
vessel and its cargoes.
Nevertheless, ESLI failed to comply with the formalities under the
Code of Commerce, specifically Arts. 813 and 814. Thus, the
consignees may not be held liable.
COLLISION - refers to the contact of two moving vessels.
ALLISION -If one vessel is moving, while the other vessel is
stationary
Under Art. 831 of the Code of Commerce, A ship owner or ship
agent, may be made liable even if his vessel did not actually
collide with another vessel which makes the owner of a third
vessel liable if it forced a vessel to hit another.
In collision, we have to determine the zones of time in order for
us to determine what law shall apply.
There exist 3 divisions:
FIRST ZONE - Covers all the time up to the moment when the risk
of
collision may be said to have begun. Within this zone no rule is
applicable because none is necessary. Each vessel is free to
directs its course as it deems best with reference to the
movements of the other vessel.
SECOND ZONE- Covers the time between the moment when the
risk of
collision begins and the moment when it has become a
practical certainty.
 There are rules that will apply here. Whether or not it is a
privilege vessel or a burden vessel, or whether it is a sole
to blame or boast to blame situation.
THIRD ZONE- Covers the time between the moment when
collision has
become a practical certainty and the moment of actual
contact.
HIGHLIGHTED CASE: G. URRUTIA & COMPANY VS BACO
RIVER PLANTATION
In this case, the Court ruled that, if during the time when the sail
vessel (we have to consider what kind of vessel) through the third
zone that it changed its course to port in order to avoid a possible
collision, the act may be referred to or may said to have been
done in extremis or what you call error in extremis and even if
that vessel is wrong, because it was done in order to avoid an
impending danger or collision, the sailing vessel is not responsible
for the result.
What happened to this case?
So this case pertains to the collision between two vessel, one
vessel is a steamer named Genesee Chief and the sail vessel. The
two vessels watched each other for some time before the collision.
And the sailing vessel kept her course until in extremis when she
made a wrong maneuver.
And the Court said:
“The collision took place in the open lake. It was a straight
starlight night and although there was haze near the surface of
the lake, it was not sufficient to conceal the sailing vessel- Cuba
from those on board of the propeller. The steam boat had the
entire command of her course and a wide water by which she
might have passed the Cuba on its side and its safe distance.
She was going at the rate of 8 miles an hour and if proper care
had been taken on board the Genesee Chief, after the schooner
was first seen, it would seem almost be impossible that a collision
could have happened with a vessel moving so slowly and
sluggishly through the water even if she was careless or in
judiciously managed.
So, there was no necessity for passing so near her as to create
the hazard. The steam boat could choose its distance and the
captain and crew of Cuba appear to have been watchful and
attentive from the time the propeller was discovered, nor do we
deem it material to inquire whether the order of the captain at the
moment of collision was judicious or not.
He saw the steam boat coming directly upon him, her speed was
not diminished nor any measures taken to avoid a collision, and if
n the excitement and alarm of the moment a different order might
have been more fortunate it was the fault of the propeller to have
been placed in a situation where there was no time for thought
and she is responsible for the consequences.
So, she had the power to have passed at a safer distance, the
steamer, and has no right to place schooner in such jeopardy that
the error of the moment might cause her destruction and
endanger lives of those onboard.
And, the court said, if an error was committed under such
circumstances it was not a fault. The steamer, according to the
court, could have avoided the collision.
NOTE: The liabilities of the ship owner and the ship agent as well
the captain or crew in collision cases are still governed by the
provisions of the Code of Commerce on collision.
International Regulation for Preventing Collisions at Sea,
(COLREGS)
An existing international agreement with respect to collisions in
high seas and waters connected to high seas that is navigable by
sea going vessels.
Although we have not yet acceded to COLREGS the rules that are
embodied therein are already being used by most of the trading
partners of the Philippines.
Therefore, the personnel of Philippine vessels are not only
required to know the provisions of COLREGS but they are even
3
compelled to follow them, more specifically Rule 7 and Rule 8 of
COLREGS with respect to rules dealing with risks of collision and
actions to avoid collisions.
Rule 8 which refers to actions to be taken to avoid collisions, if the
circumstances of the case admit shall be positive, made in ample
time, and with due regard to the observance of good seamanship.
RULES ON LIABILITY:
1. Liability in collision cases are negligence-based. The
courts are still called upon to determine the negligence
of the persons involved, in order to impose liability. The
persons who caused the injury are both civilly and
criminally liable under Article 829.
2. To determine negligence the test of reasonable man in
the position of an expert that applies in quasi-delict
cases should also be applied, although with due
consideration to the expertise of the persons
involved including the carrier itself, the captain,
officers, and crew of the vessels.
It is still required to determine if a reasonable man with
the same expertise would have done what the party in
question did under the same circumstances.
The determination of what is reasonable depends in the
circumstances of each case. The same expertise of a
reasonable man should also be taken into consideration
in determining the question of reasonableness.
It is still relevant to determine if the collision is sufficient
to be foreseeable, such that a reasonable man with the
same expertise could have avoided the impact.
3. In some respect, rules that apply to quasi-delict cannot
be applied in collision cases.
Doctrine of last clear chance and the rule on contributory
negligence cannot be applied in collision cases because
of the provisions of Article 827 of the Code of
Commerce.
Therefore, if both vessels were negligently operated, it
does not matter if the other has the last clear chance of
avoiding the injury because under Article 827 – each
vessel must have to suffer its own damage if both of
them are negligent.
Although negligence on the part of the mate of the
incoming vessel proceeded the negligence on the part of
the mate of the outgoing vessel, by an appreciable
interval of time, the first vessel, cannot, on that
account, be absolved from responsibility.
Similarly, if is the proof that the plaintiff was negligent
will bar recovery from the defendant in collision cases
even if the plaintiff’s negligence can be classified as
merely contributory. This is because of the application of
Article 827.
RULES ON COLLISIONS:
Art. 826 (SOLE TO BLAME) – ONE VESSEL at fault collides with
another through the FAULT, NEGLIGENCE, OR LACK OF SKILL of
the captain, sailing mate or any other member of the
complement.
- Owner of the vessel who is at fault SHALL INDEMNIFY the
losses and damages that were suffered AFTER THERE IS
AN EXPERT APPRAISAL.
- The vessel at fault shall indemnify the damage sustained
or losses incurred. If both vessels were at fault, each shall
suffer its own damages, and both shall be solidarily liable
to others - under 827 and 828.
Art. 827 (BOTH TO BLAME) - IF BOTH VESSELS ARE AT FAULT
may be blamed for the collision, EACH SHALL BE LIABLE FOR HIS
OWN DAMAGES and BOTH shall be jointly responsible for the
damages and losses suffered by their cargoes.
Note: Collision is imputable to both vessels, each one shall suffer
its own damages, and both shall be solidarily responsible for the
losses and damages occasioned to their cargoes. In other words,
when it comes to damages to their respective vessels, the losses
rests where they fall. Meaning to say, each one shall be held
responsible.
With respect to damages to the cargoes, the ship owner and ship
agent of the vessels involved, in the collision, are liable to the
shippers. The liability is - joint and several. and there will be no
apportionment of liability and each ship owner or ship agent is
liable for the whole damage or injury.
Art. 828 – this is under the DOCTRINE OF INSCRUTABLE fault
where it explains that the provision of the preceding article - 827
- are applicable to the case in which it cannot be determined
which of the two vessels has caused the collision. Article 828 will
be dependent on Article 827.
Under the doctrine of inscrutable fault - where fault is
established but it cannot be determined which of the two
vessels were at fault, both shall be deemed to have been at
fault. The effect would be, both of them shall be liable for their
own losses and the cargoes of the shipper, and shall be solidarily
liable to the cargo owners.
So, it was explained here, that the rule on solidary liability under
827 and 828 of the code is applicable and not only to a case
where both vessels maybe shown to be actually blame worthy,
but also the case where it is obvious that only one was at fault but
the court cannot determine or there is no proof that would show
that either vessel is responsible or have caused the damage or
collision.
Art. 830 - If a vessel should collide with another by reason of an
accident or through force majeure, each vessel and her cargo
shall be liable for their own damage
Art. 831- vessel should be forced to collide with another because
of a third vessel, the OWNER OF THE THIRD VESSEL SHALL
INDEMNIFY FOR THE LOSSES AND DAMAGES CAUSED, THE
CAPTAIN THEREOF BEING CIVILLY LIABLE TO SAID OWNER.
Art. 832- A vessel that is properly anchored and moored should
collide with those vessels in immediate vicinity causing damage by
reason of a storm or other cause of force majeure the injury shall
be looked upon as a particular average to the vessel run into.
- This falls under the Simple and Particular Average
Art. 833 – A vessel shall be presumed lost through a collision if:
1. such vessel sink immediately.
2. A vessel is obliged to make a port to repair the damages
caused by the collision should be lost during the voyage
3. Vessel obliged to be stranded in order to be saved.
Art. 834 – If vessels colliding should have PILOTS ON BOARD and
were discharging their duties at the time of collision, their
presence SHALL NOT EXEMPT THE CAPTAINS from their liabilities
they incur.
4
Captains shall have the right to be indemnified without prejudice
to the criminal liability which the latter may incur.
HIGHLIGHTED CASE: PHILIPPINES VS PHILIPPINE
STEAMSHIP CO. INC.
FACTS:
The coastwise vessel Isabel, equipped with motor and sails, left
the port of Manila with primary destination to Balayan, Batangas,
carrying, among its cargo, 911 sacks of rice belonging to the
plaintiff and consigned to points in the south. After the boat had
been under weigh for about four hours, and had passed the San
Nicolas Light near the entrance into Manila Bay, the watch and the
mate on the bridge of the Isabel discerned the light of another
vessel, which proved to be the Antipolo, also a coastwise vessel,
on its way to Manila and coming towards the Isabel. At about the
same time both the watch and mate on the bridge of the Antipolo
also saw the Isabel, the two vessels being then about one mile
and a half or two miles apart. Each vessel was going
approximately at the speed of 6 miles an hour, and in about ten
minutes they had together traversed the intervening space and
were in close proximity to each other.
When the mate of the Antipolo, who was then at the wheel,
awoke to the danger of the situation and saw the Isabel "almost
on top of him," to use the words of the committee on marine
accidents reporting the incident, he put his helm hard to the
starboard.
This maneuver was correct, and if the helmsman of the Isabel had
done likewise, all would apparently have been well, as in that
event the two vessels should have passed near to each other on
the port side without colliding. As chance would have it, however,
the mate on the Isabel at this critical juncture lost his wits and, in
disregard of the regulations and of common prudence, at once
placed his own helm hard to port, with the result that his boat
veered around directly in the path of the other vessel and a
collision became inevitable.
ISSUE: To whom shall negligence be imputed? Both
HELD: Both vessels were at fault; and although the negligence on
the part of the mate of the incoming vessel preceded the
negligence on the part of the mate of the outgoing vessel by an
appreciable interval of time, the first vessel cannot on that
account be absolved from responsibility. Indeed, in G. Urrutia &
Co. vs. Baco River Plantation Co., supra, this court found reason
for holding that the responsibility rested exclusively on a steamer
which had allowed dangerous proximity to a sailing vessel to be
brought about under somewhat similar conditions.
We are of the opinion therefore that his Honor, the trial judge,
committed no error in holding that both vessels were to blame
and in applying article 827 of the Code of Commerce to the
situation before him. It is there declared that where both vessels
are to blame, both shall be solidarily responsible for the damage
occasioned to their cargoes. As the Isabel was a total loss and
cannot sustain any part of this liability, the burden of responding
to the Government of the Philippine Islands, as owner of the rice
embarked on the Isabel, must fall wholly upon the owner of the
other ship, that is, upon the defendant, the Philippine Steamship
Company, Inc.
Only one observation will be added, in response to one of the
contentions of the appellant's attorneys, which is, that the
application of article 827 of the Code of Commerce is not limited
by article 828 to the case where it cannot be determined which of
the two vessels was the cause of the collision. On the contrary
article 828 must be considered as an extension of article 827 to
an additional case. In other words, under the two articles
combined the rule of liability announced in article 827 is
applicable not only to the case where both vessels may be shown
to be actually blameworthy but also to the case where it is
obvious that only one was at fault but the proof does not show
which.
Burdened Vessel Privileged Vessel
A vessel that gives way to The vessel given way by the
another vessel burdened vessel.
Examples: 2 VESSELS ARE ABOUT TO ENTER A PORT
GR = Collision between farther (burdened vessel) and nearer
vessel (privileged vessel) to port, farther vessel liable.
EX = Unless no proof of fault against the farther vessel.
The farther vessel must allow the vessel who is nearer to port to
enter first. If they collide, the fault is presumed and imputed vs.
the vessel who arrived later. 
Unless there was no fault on the farther vessel.
2 VESSELS MEET
The smaller vessel must give way to the larger one.
1 VESSEL LEAVING PORT
1 vessel who is leaving the port should make the way clear for
another vessel entering a port.
Here, the vessel entering the port is the privileged vessel while
the vessel leaving the port is the burdened vessel.
This is the same as in airports. The plane that landed must
immediately give way to a plane about to land.
1 VESSEL SETTING SAIL IN THE NIGHT COLLIDES WITH A
ANOTHER VESSEL
A vessel leaving at night is presumed to be the vessel that
collided another vessel.
1 VESSEL WITH SPREAD SAILS COLLIDES WITH AN
ANCHORED VESSEL
A vessel with spread sails is presumed to be the vessel that
collided another vessel in anchor or that cannot move, even if the
crew of the collided vessel has received word to lift anchor when
there was no sufficient time to do so.
Or there was fear of greater damage or other legitimate reason.
THE VESSEL WHICH IS NOT PROPERLY MOORED
The vessel which is not properly moored (wrong parking or
improper berthing or does not observe proper distances) has
presumption against itself.
It means that you were not properly parked and there was
damage because of collision, the presumption is against the
vessel who was not properly berthed.
5
THE VESSEL WHICH IS MOORED AT A PLACE NOT USED FOR
THE PURPOSE
The vessel which is moored at a place not used for the purpose or
which is improperly moored or does not have sufficient cables, or
which has been left without a watch, has also against itself the
presumption.
VESSELS WHICH DO NOT HAVE BUOY TO INDICATE THE
LOCATION
The same rule applies to all those vessels which do not have buoy
to indicate the location of its anchors to prevent damage to the
vessels which may approach it.
Example of buoy: Those ball-like structures that you can see in
Paradise Island. It serves as indicators that the level of water
after the said structure is already deep. If you are swimming, you
are not allowed to go outside of the buoy. It is required in every
beach resort to put such indicators.
MARITIME PROTEST – under Art. 835 written statement
under oath made by the captain of vessel after the occurrence of
an accident or disaster in which the vessel or cargo is lost or
injured with respect to circumstances attending such occurrence.
The purpose of a maritime protest is that it is usually intended to
show that the
loss or damage resulted from a peril of the sea or some other
cause for which
neither the master nor owner was responsible. It concludes with
the
protestation against any liability of the owner for such loss or
damage.
MARITIME PROTESTS IN COLLISIONS
Rule: Under Art. 829 an owner may proceed against those
responsible for civil and criminal liability. This is referred to as
reservation of liability in culpable collision In collision cases,
take note that the captain of the innocent vessel must file a
marine protest within twenty-four (24) hours upon
reaching the nearest port. Failure of the captain to do so, bars
recovery no matter how meritorious the case is.
Exception: Under Article 836, which provides that the failure to
file a marine protest will not however prejudice the following:
1. The cargo owners if they are not on board
2. Innocent vessel that does not have a buque (a vessel
that has no deck)
3. Small crafts in the bay or rover traffic.
Under Art. 835 an action for recovery of losses and damages
arising from collisions of boats engaged in traffic upon Philippine
waters, a sworn statement is required to be presented
within 24 hours to the competent authority of the point
where the collision took place or the first port of arrival of the
vessel.
This provision applies to all persons engaged in such traffic in
these islands and a defendant has as much right to insists upon
compliance with this provision of the Code where the damages
were done to a boat operated by the Government as if such boat
had been operated by a private individual or company.
Exceptions of Maritime Protest Art. 612:
The protest is required:
1. When the vessel makes arrival under stress.
2. Under 612 and 843, in case of shipwreck
3. In case that the vessel has gone through a hurricane or
when the captain believes that the cargo suffered
damages or averages under Article 624
4. In case of maritime collision under Article 835
What are the exceptions? It is not a condition precedent under
the following circumstances:
1. If it is a motorboat vessel, that is not a merchant vessel
within the meaning of Article 835
2. A person under Article 826 who on account of the
collision has suffered physical injuries sufficient to
enable him to make a protest
Take note of the common distinction of the civil code, code of
commerce and COGSA with respect to the degree of diligence
required, exculpatory causes, the presumption of negligence, and
the period within which to file an action. 
ARRIVAL UNDER STRESS – arrival of a vessel in the nearest
and most convenient port which was decided after determining
that there are grounds for arrival under stress.
GROUNDS FOR A VALID ARRIVAL UNDER STRESS:
1. Lack of provisions 
2. Well-founded fear of seizure of privateers or pirates
3. By reason of any accident of the sea disabling the vessel to
navigate
Art. 819- provides for the formalities of the determination of
propriety of an arrival under stress. 
Art. 820 - provides for the circumstances where arrival under
stress is not proper or not considered legal.
1. lack of provisions should arise from the failure to take
the necessary provisions for the voyage, according to
usage and custom, or if they should have been rendered
useless or lost through bad stowage or negligence in
their care.
2. If the risk of enemies, privateers, or pirates should not
have been well known, manifest, and based on positive
and justifiable facts.
3. If the injury to the vessel should have been caused by
reason of her not being repaired, rigged, equipped, and
arranged in a convenient manner for the voyage, or by
reason of some erroneous order of the captain.
4. Whenever malice, negligence, want of foresight, or lack
of skill on the part of the captain is the reason for the
act causing the damage.
Art. 821 – Provides for expenses on arrival under stress if lawful
or unlawful.
LAWFUL - ship-owner and ship agent will only be liable for the
expenses of the same arrival.
UNLAWFUL - in addition to the lawful expenses they shall
solidarily be liable for damages caused to the cargos by such
arrival under stress. 
6

Art. 822- provides for formalities that must be complied for
unloading of cargos or to make repairs.
In order that the captain may unload cargo during arrival under
stress:
1. Unloading must be Necessary to make repair;
2. Unloading because there is Danger that the cargo may suffer
damage;
3. Unloading is with Authority of either competent court if
domestic
or by the Philippine Consul if foreign.
Art. 823 – if the cargo has been unloaded it shall be under the
care and preservation of the captain who is also responsible for it
EXCEPT IN CASES OF FORCE MAJEURE.
Art. 824 – It is allowed for the sale of the cargo either the whole
or a part of it if it should appear to be damaged or there is
imminent danger of it being damaged.
The captain may request the judge or consul for the sale of all or
part of the cargo.
Art. 825 – the captain shall answer for damages caused by his
delay if the reason for arrival under stress has stopped, he should
not continue the voyage. If the reason for said arrival should have
been the fear of enemies, privateers, or pirates, before sailing, a
discussion and resolution of a meeting of the officers of the vessel
and persons interested in the cargo who may be present shall
take place, in accordance with the provisions contained in Article
819.
SHIPWRECK – the demolition or shattering of a vessel caused by
driving ashore or on racks and shows in the mid seas or by
violence of the winds and wages of tempest.
Ship which has received injuries rendering her incapable
of navigation. It is also defined as loss of a vessel at sea, either
by being swallowed up by the waves, by running against another
vessel or thing at sea, or on the coast.
BURDEN OF LIABILITY (ART. 841)
GR: Ordinarily, in case of shipwreck each owner shall bear his
own losses,
such as those arising from force majeure.
XPN: The captain shall be liable if:
1. Malice, negligence or lack of skill of the captain; or
2. Because the vessel was put to sea was insufficiently repaired
and
equipped.
Goods saved in a Shipwreck (Art. 842)
The goods saved from the wreck shall be:
 Specially bound for payment of expenses for respective
salvage
 And amount thereof must be paid by owners of the
goods saved before they are delivered to them,
 With preference over any other obligation if the
merchandise should be sold
Shipwreck in case of Convoy (Art. 843)
If several vessels sail under convoy and any of them be wrecked
 The cargo saved shall be distributed among the rest in
proportion each one is able to take
If the captain/s of the other vessels refuse, the captain of wrecked
vessel
shall enter a protest against the former.
If not possible to transfer the entire cargo of wrecked vessel:
 The goods of highest value and lowest volume saved
first
SALVAGE LAW - A compulsory reward to those who face the
terrors of the sea to save the cargo or vessel in order to
encourage acts of service.
- Whether the owner of the property likes it or not,
he must give a reward which is 50% of the
maximum amount of the value of the property
saved.
CONCEPTS OF SALVAGE LAW:
A. SERVICE BY ANOTHER TO THE OWNER OF A SHIP OR
GOODS, by his own labor,
preserving the goods or the ship which the owner or those
entrusted with
the care of them have either abandoned in distress at sea or are
unable to
protect or secure.
B. COMPENSATION ALLOWED TO PERSONS by whose
voluntary assistance a ship at sea or her cargo or both have been
saved in whole or in part from impending sea peril, or such
property recovered from actual peril or loss as in cases of
shipwreck, derelict or recapture.
C. CONTRACT OF TOWAGE VS SALVAGE LAW
-> While both salvage and towage are services ,they are not the
same. A
contract whereby one vessel, usually motorized, pulls another,
whether
loaded or not with merchandise, from one place to another, for a
compensation. It is a contract for services rather than a contract
of carriage.
REQUISITES FOR A VALID SALVAGE REWARD:
1. There must be a valid object of salvage ex. Vessel,
cargo, freight or wreck of vessel or cargo
2. Object must have been exposed to marine peril
3. Salvage services must be rendered VOLUNTARILY and
NOT ARISING FROM A PRE-EXISTING DUTY
4. Salvage effort must be SUCCESSFUL
DEFINTION OF TERMS UNDER THE SALVAGE LAW:
1. Derelict – a vessel or cargo that is badly damaged and
abandoned by the crew to the mercy of the sea.
- This abandonment is not res nullius this means that
it is free for all to salvage, so anybody can claim it
because there is a proper procedure to consider it
as Res Nullius.
NOTE: Res Nullius -> a thing belonging to no one whether
because never appropriated (as a wild animal) or because
abandoned by its owner but acquirable by appropriation.
 If the owner of a property abandons the same, then,
that property is called res nullius.
2. Desertion- act by which a seaman deserts and
abandons a ship or vessel, in which he had engaged to
perform a voyage, before the expiration of his time, and
without leave.
 an unauthorized absence from the ship with an intention
not to return to her service
 It is essential that there be an animo non revertendi, an
intention not to return.
7
  Once the facts are prove the seaman may be dismissed
by the master, or he may be suspended by the POEA for
three years as minimum penalty or delisted from the
POEA registry as maximum penalty.
3. Maritime Lien – a lien of a salvor under maritime law
having interest in the property.
- It never goes, in the absence of a contract
expressly made, upon the idea of debt due from the
owner to the salvor but upon the principle that the
service creates a property in the thing saved. The
salvor is, to all intents and purposes, a joint owner
and if the property is lost, he must bear his share
like the other joint owners.
SUBJECTS OF SALVAGE:
1. Ship itself;
2. Jetsam – goods which were thrown off a ship which was in
danger into the sea, and there sink and
remain underwater;
3. Floatsam or flotsam – goods which float upon the sea when
cast overboard because the ship was in danger.
4. Ligan or Lagan – goods cast into the sea tied to a buoy so
that
they may be found again by the owners.
NOTE: The cargoes under these circumstances, unless
abandoned, are still the property of their original owners.
PROCEDURE FOR THE SALVAGE LAW:
1. If the vessel is abandoned, the salvor must tow it
to the nearest port where it will be delivered to
the municipal treasurer or Collector of Customs
who will advertise the fact of salvage;
The fact of salvage has to be advertised;
hence, the vessel should first be delivered to
the proper authorities.
2. If the owner of the salvaged vessel appears
(because of the notice), he may take possession of
the vessel and must pay a reward not exceeding
50% of the value of the vessel.
CASES:
BARRIOS VS CARLOS GO THONG & CO.
FACTS: Vessel MV Don Alfredo suffered engine failure and it
drifted towards the open sea. While there was no danger of being
stranded or sinking as the weather was fair and the sea was
smooth and calm, the vessel could not move on its own power.
So, MV Henry I responded to the S.O.S. or distress signal from
MV Don Alfredo where MV Henry I towed MV Don Alfredo.
A sister ship of MV Don Alfredo arrived and took over the towing
service causing MV Henry I to leave.
The owner of MV Henry I expressly waived its claim for
compensation for the service done, but the captain of MV Henry I
made a salvage claim against the owner of MV Don Alfredo.
RULING: A. There was no salvage as there was no marine peril
and the vessel was not a derelict as to warrant a valid salvage
claim for the towing of the vessel.
B. MV Henry I service to MV Don Alfredo can be considered as a
quasi-contract of "towage" because in consenting to MV Henry I's
offer to tow the vessel, MV Don Alfredo thereby impliedly entered
into a juridical relation of "towage" with the owner of the towing
vessel.
KINDS OF SALVAGE SERVICES:
C. The captain of MV Henry I was not entitled to compensation
since contract is one of towage. Only the owner of the towing
vessel is entitled to remuneration. But, in this case, the owner
has already waived its claim for compensation for the service
done.
THOMAS WALLACE VS PUJALTE
FACTS: The Schooner named Kodiak was lost off the coast of
Mindoro and abandoned by its captain and crew. Schooner is a
small sea-going sailing vessel with 2 masts.A report of her loss
reached the Collectors of Customs who immediately issued a
circular to all masters of steamers & vessels plying Philippine
waters declaring “Kodiak” a derelict and danger to navigation.
Pijete & Co. chartered the coast guard cutter “Mindoro” (a cutter
is a boat belonging to a ship fitted for roving and sailing) and
proceeding to search for Kodiak and FOUND KODIAK FLOATING
AND ABANDONED & UNDER WATER. Despite heavy sea,
strong wind, Pijete succeeded in towing her to the port of Pola,
Mindoro.
Being safe at port, Pijete chartered Lakandula with lighters and
salve equipment for the use on Kodiak. Pending salvage
operations, VALLACE WROTE PIJETE OFFERING TO PAY FOR
THE SERVICES RENDERED AND DEMANDING THE DELIVERY
OF KODIAK.
In the demand letter, Vallace provided for a period of 10 days
within which to reply, otherwise, they will not answer for any
expenses after that. No bills could be furnished within the said
period but the salvage operations continued. However, before the
operations were completed, Vallace instituted an action to recover
possession of Kodiak.
RULING: PIJETE WERE ENTITLED TO THE POSSESSION OF
THE VESSEL. The Court declared that the salvors retains
possession of the vessel until the owner pays the reasonable
expenses.
HOW IS THE REWARD DETERMINED?
1) The value of the property saved and the danger to
which such property was exposed
2) The zeal employed and the labor expended by the
salvors in rendering the salvage service by those
who made the salvage
3) The danger/risk to lives of those who participated
4) The number of persons who took part
5) The services rendered or the promptitude, skill and
energy displayed in rendering the service and
saving the property
6) The expenses incurred.
HOW IS THE REWARD DETERMINED?
 If no claim is made on the vessel within 3 months
after the publication of the advertisement (report salvage
to municipal treasurer of customs), the municipal
treasurer will sell the property saved at public auction and
the reward and expenses shall be deducted from the
proceeds. The balance is deposited with the treasurer.
 If no one claims after 3 years, 1/2 shall go to the
salvors and other half to the government.
 If the vessel saves another vessel, the reward going
to the former shall be divided as follows: 1/2 to the
shipowner, 1/4 to the captain and 1/4 to the crew.
8
1. Voluntary Salvage – dependent on the success of the salvage
operation in order for the salvors to obtain compensation.
2. Salvage Service rendered per diem or per horam – payment is
based upon the property saved. This is payable at all events.
3. Contract of Salvage- the salvor and the owner enter into a
contract and bound by their stipulation but it must always be a
successful salvage.
- This involves stipulated consideration for salvage
services.
CASE: C.S. Robinson, et. al. v. the Ship Alta et al. held that
“where a stipulated compensation is dependent upon success and
particularly of success within a limited time, it may be very
much larger than a mere quantum merit. Such contracts will
not be set aside by Courts unless corruptly entered into, or made
under fraudulent representation, a clear mistake or suppression
of important facts, in immediate danger to the ship, or under
other circumstances amounting to compulsion, or when their
enforcement would be contrary to equity and good conscience.
Here, M/V Alta and a salvage service was entered into with an
agreement of compensation of P15K. The owner paid only P3K.
The salvor is demanded the full amount in the contract.
Erlanger & Galinger v. Swedish East Asiatica Co. - It held
that “Quantum Meruit” is not applicable. The Court said that
compensation as salvage should not be viewed by the admiralty
courts merely as pay on the principle of quantum meruit or as a
remuneration “pro opera er labore”, but as a reward given for
perilous services, voluntarily rendered, and as an inducement to
mariners to embark in such dangerous enterprises to safe life and
property. The amount should be liberal enough to cover the
expenses and to give an extra sum as a reward for the services
rendered. There is no fixed rule for salvage allowance. The
allowance rests on the sound discretion of the court or judge who
hears the case, hears the witnesses testify, and is familiar with
the environment of the rescue. An allowance for salvage should
not be weighted in golden scales, but should not be made as a
reward for meritorious voluntary services, rendered at a time
when danger of loss is imminent and for the purpose of
encouraging others in like services.
COGSA - in consonance with water maritime rules and the
practices of
the great shipping countries of the world. When the Civil Code
took effect on
August 30, 1950, it became the primary law on carriage of goods
by sea. Among its provisions on common carriers is Article 1953
which provides that “the law of the country to which the goods
are to be transported shall govern the liability of the common
carrier for their loss, destruction or deterioration.”
Hence, the New Civil Code is the primary law on goods that are
being transported from a foreign port to the Philippines.
Nevertheless, the COGSA remains to be a suppletory law for such
type of transportation – international shipping.
1. For domestic trade; Civil Code and Code of Commerce applies;
2. For foreign trade, the COGSA applies.
The Civil Code and Code of Commerce is suppletory to COGSA in
the carriage
of goods from foreign ports to the Philippines.
Under Article 1753, NCC the law of the country to which the
goods are to be transported shall govern the liability of the
common carrier for loss, destruction, deterioration of the goods.
The Civil code is the primary law on goods that are being shipped
from a foreign port to the Philippines. However, COGSA remains
to be a suppletory law for international shipping.
Paramount Clause – this is a clause when the provisions of the
COGSA
is made to apply in domestic sea transportation if agreed upon.
Goods. – Includes goods, wares, merchandise and articles of
every kind
whatsoever, except live animals and cargo which is by the
contract of
carriage as being carried on deck and is so carried. Those carried
on deck are
not included because of YA Rules.
Parties: Shipper and Carrier
They are given their respective right and obligations under
COGSA, the
carrier covered under COGSA is not only the ship owner but also
charterer
for the latter conducts his own business on his account.
The carrier includes the charterer who enters into a contract of
carriage with the shipper. In the case of the charterer, the
charterer charters a vessel and conducts his own business for his
own account. After chartering the vessel, the charterer uses the
vessel to conduct a business of transportation obtaining goods
from third persons to transport the latter’s goods.
Carrier Duties– Section 2 of COGSA covers the carrier’s
obligation and liabilities in relation to loading, handling, stowage,
carriage, custody, care and discharge of such goods. Section 3
enumerates the responsibilities of the carrier under COGSA
subject to the provisions of the Civil Code which serves as the
primary law.
Section 3, paragraphs (1) and (2) expresses the 2 overriding
obligations of the carrier under prevailing jurisprudence when
COGSA was passed: (1) obligation to use due care with respect
to the cargo and (2) the obligation to provide a seaworthy vessel
at the beginning of the voyage.
Obligation of Carrier
1. To use due care in handling cargo (with extraordinary care)
2. To provide seaworthy vessel at beginning of voyage
Documents Covered by COGSA
1. Bill of lading; and
2. Charter party
If both are present, the BOL represents the cargo that was
received by the
carrier and that obligation, responsibilities and obligation of the
parties is
under the charter party.
NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD – Unlike the
provisions of the Code of Commerce, the notice of claim under
COGS must be made within 3 days from delivery if the damage is
not apparent. The same period is not mandatory. However, the
prescriptive period of one year from delivery for the filing of the
case is a condition precedent or mandatory. (Section 3(6)
COGSA).
Take note that the 1-year prescriptive period does not apply to
cases of misdelivery or conversion
When to file case in court: Suits for loss or damage to the
cargo should be
brought within 1 year from
1. Delivery of the goods; or
2. Date when goods should have been delivered
This one-year period is not suspended by extrajudicial demand as
matters
should be decided at the shortest time possible and Civil Code
does not
apply to special law like COGSA.
9

CASES: In Domingo Ang v. American Steamship, the court
did not apply
the one-year period by reason that there was misdelivery and not
nondelivery
thus the 1-year prescriptive period does not apply. In Section
3(4) of
COGSA the word loss in “loss or damage” refers to non-delivery,
like when
the goods have perished, gone out of commerce but it does not
include
situation of misdelivery or delivery to the wrong person.
In Merchants Insurance v. Alejandro 145 SCRA 42, the one-
year
period under COGSA includes the insurer of the goods. Otherwise,
what was
prohibited can be allowed indirectly by simply filing a claim
against insurer
even against the lapse of one year. This could not have been the
intention as
its purpose is to protect the carrier and ship from fraudulent
claims.
DEFENSES AND IMMUNITIES
Section 4 of the COGSA provides for the defenses and immunities
however these defenses are subject to the amendatory provisions
of NCC.
[1] Section 1 provides that the carrier shall not be liable for loss
or damage
due to unseaworthiness, however under the Civil Code, there is
presumption
of negligence, thus it can only excuse itself from liability if it can
show that
the unseaworthiness was due to any of the exculpatory causes
under Article
1734 of NCC.
[2] Stipulation limiting liability under Article 1744 of the NCC as
long as it is
[1] in writing and signed by shipper or owner; [2] supported by a
valuable
consideration other than service; [3] reasonable and not contrary
to public
policy. Similarly, Section 3 (8) of COGSA provides that a
stipulation relieving
carrier from liability shall be of no effect.
[3] Amount of Carrier’s Liability
Under Section 4(5) of the COGSA, the liability limit is set at $500
per package
or customary freight unless nature and value of goods is
declared by
shipper. This is deemed incorporated in BOL even if not
mentioned in it
(Eastern Shipping v. IAC).
LIMITING PROVISION – As noted in Chapter 3, the COGSA
contains a provision that allowed the shipper to recover only
$500/package unless there is a special declaration unless the real
value of the goods is declared. Applicable is Section 4(5) of
COGSA.. Section 3(8) provides for limiting stipulations that are
considered void. “Any clause, covenant, or agreement in a
contract of carriage relieving the carrier of the ship from liability
for loss or damage to or in connection with the goods, arising
from negligence, fault, or failure in the duties and obligations
provided in this section or lessening such liability otherwise than
as provided in this Act, shall be NULL and VOID and of NO effect.
A benefit of insurance in favor of the carrier, or similar clause,
shall be deemed to be a clause relieving the carrier from liability.
PUBLIC SERVICE LAW
The basic law that governs public service is the Public Service Act,
Com. Act No. 146, as amended. The powers of the Public Service
Commission are now being exercised by different government
agencies. Although the provisions of the Public Service Act still
defines the basic components and contents of regulation to be
exercised by these government agencies, there may be rules that
are peculiar to each of them.
The following regulatory agencies are as follows:
1) DOTC
2) LTFRB – land transportation
3) LTO – registration of drivers and motor vehicles
4) MARINA – water transportation
5) PCG – concerned with safety in water transportation
6) NTC – communication utilities and services, radio
communications system, wire or wireless telephone and
telegraph systems, radio and television broadcasting
systems and other similar public utilities.
7) ENERGY REGULATORY COMMISSION – electric or power
companies
8) National Water Resources Counsel – water resources
9) Civil Aeronautics Board (CAB)– air transportation
particularly its economic aspects
10) Civil Aviation Authority of the Philippines (CAAP) –
undertakes the maintenance and operation of airports
and other similar facilities, registers aircrafts and other
incidents concerning the same and provides safety
regulations in air transportation.
BASES OF REGULATION OF PUBLIC UTILITIES – The POLICE
POWER OF THE STATE JUSTIFIES THE REGULATION OF
PUBLIC UTILITIES. In other words, regulation of public utilities
is founded upon the police powers of the State and statutes
prescribing rules for the control and regulation of public utilities
are considered valid exercise thereof.
The exercise of police power is justified because whenever private
property is used for a public purpose and is affected with public
interest, it ceases to be juris private only and becomes subject to
regulation. The regulation is to promote the common good.
Submission to regulation may be withdrawn by the owner by
discontinuing use; but as long as use of the property is continued,
the same is subject to public regulation.
AVIATION LAW – The 1st airplane flight was in February 1911
by James Mars while the first cross-country flight was by
Thomas C. Baldwin in the same month. It was in 1919 when
the 1st airline was organized by Joseph E.H. Stevenot and Alfred
C. Croft, the Philippine Airways Service, Inc.
The case of JOSE MENDOZA V. PAL, INC. NO. L-
3678, February 29, 1952 is significant because the question
of whether airline companies may be considered common
carriers were raised considering its non-Inclusion in the Code of
Commerce. The Court held that the obvious reason of its non-
inclusion was that at the time of its promulgation, transportation
by air on a commercial basis was not yet known. In the US where
air transportation has reached its highest development, an airline
company engaged in the transportation business is regarded as a
common carrier.
CIVIL AVIATION – “AERONAUTICS OR AVIATION” refers to
the science and art of flight. “Civil aviation” refers to the operation
of any civil aircraft for the purpose of general aviation operations,
aerial work or commercial air transport operations.
10
“Aircraft” refers to any machine that can derive support in the
atmosphere from the reactions of the air other than the reactions
of the air against the earth’s surface. The term “aircraft”, when
used in the Civil Aviation Act, shall refer to civil aircraft only, and
will not include State or public aircraft.
REGISTRATION OF AIRCRAFT – “Philippine aircraft” means an
aircraft registered in the Philippines in accordance with the
requirements of the CIVIL AVIATION AUTHORITY ACT OF
2008. This is CONSISTENT WITH ARTICLE 17 CHAPTER III
OF THE CHICAGO CONVENTION WHICH PROVIDES THAT
“AIRCRAFT HAVE THE NATIONALITY OF THE STATE IN
WHICH THEY ARE REGISTERED.” The Chicago Convention
likewise provides that every aircraft in international air navigation
shall bear its appropriate nationality and registration marks.”
The Chicago Convention provides that “an aircraft
cannot be validly registered in more than one State, but its
registration may be changed from one State to another.
RECORDING OF CONVEYANCES – All conveyances made or
executed, which affects the title to, or interest in, any aircraft of
Philippine registry, or any portion thereof shall be registered with
the Civil Aviation Authority of the Philippines (CAAP).
a. The validity of voluntary dealings concerning aircrafts
with the CAAP is subject to the following rules:
1) The registration is valid only with respect to the parties
and their heirs, assignees, executors, administrators,
devisees or successor in interest, and any person having
actual notice thereof.
2) The registration is valid as against all persons and any
instrument, recording of which is required shall take
effect from the date of its record in the books of the
Authority, and not from the date of its execution.
b. The requirements are similar to the requirements in land
registration. It should be noted that under Section 52 of the
Property Registration Decree (PD 1529), the owner may use
forms of deeds, mortgages, leases or other voluntary instruments
as are sufficient in law. The owner’s duplicate of the certificate of
registration must be presented before registration is effected.
AIR TRANSPORTATION IN GENERAL – Air commerce or
commercial air transport operation refers to and includes
scheduled air transport services for pay or hire, the navigation of
aircraft in furtherance of a business, the navigation of aircraft
from one place to another for operation in the conduct of a
business, or an aircraft operation involving the transport of
passengers, cargo or mail for remuneration or hire.
a. Domestic air commerce – means and include air
commerce within the limits of the Philippines territory.
b. Domestic air transport, means air transportation within
the limits of the Philippine territory.
c. Foreign air transport, refers to air transportation
between the Philippines and any place outside it or
wholly outside the Philippines.
d. International commercial air transport, refers to the
carriage by aircraft of persons or property for
remuneration or hire or the carriage of mail between any
two (2) or more countries.
PERSONS INVOLVED IN AIR TRANSPORTATION – persons
and entities involved in air transportation that are regulated by
the CAAP principally include the air carrier or operator. Air
operators may either be Philippine Air Carrier or a Foreign Air
Carrier.
1) AIR CARRIER OR OPERATOR, refers to a person who
undertakes, whether directly or indirectly, or by a lease
or any other arrangements, to engage in air
transportation services or air commerce.
2) PHILIPPINE AIR CARRIER, means an air carrier who
is a citizen of the Philippines.
3) FOREIGN AIR CARRIER OR FOREIGN AIR
OPERATOR, means an operator, not being a Philippine
air operator, which undertakes, whether directly or
indirectly or by lease or any other arrangement, to
engage in commercial air transport operations within
borders or airspace of the Philippines, whether on a
scheduled or chartered basis.
4) AIRMAN, refers to any individual who engages, as the
person in command or as pilot, mechanic, aeronautical
engineer, flight radio operator, or member of the crew,
in the navigation of aircraft while under way and any
individual who is directly in charge of inspection,
maintenance, overhauling, or repair of aircraft, aircraft
engine, propellers, or appliances and individual who
serves in the capacity of aircraft dispatcher or air traffic
control operator.
CIVIL AERONAUTICS BOARD (CAB) – regulates persons and
entities that are involved in the economic aspects of air
transportation. These include not only the airline companies but
also such entities as General Sales Agents, Cargo Sales Agents,
Charterers, Air Freight Forwarders, Off-line Carriers and Air Taxi
Operators.
1) GENERAL SALES AGENT – means a person, who,
pursuant to an authority from an airline, by itself or
through an agent, sells or offers for sale any air
transportation or negotiates for or holds himself by
solicitation, advertisement or otherwise as one who
sells, provides, furnishes, contract or arranges for, such
air transportation.
2) CARGO SALES AGENT – means any person who does
not directly operate an aircraft for the purpose of
engaging in air transportation or air commerce and who,
as principal or agent, sells, or offers for sale any
transportation of cargo, or negotiates for, or holds
himself out by solicitation, advertisement or otherwise
as one who provides, sells, furnishes, contract or
arranges for, such air transportation or cargo.
3) AIR FREIGHT FORWARDER, means any indirect air
carrier which, in the ordinary and usual course of its
undertaking, assembles and consolidates or provides for
assembling and consolidating such property and
performs or provides for the performance of break-
bulking and distributing operations with respect to
consolidated shipments, and is responsible for the
transportation of property from the point of receipt to
the point of destination and utilizes for the whole or any
part of such transportation the services of a direct air-
carrier.
11
 4) OFF-LINE CARRIER means any foreign air carrier not
certificated by the Board, but who maintains office or
who has designated or appointed agents or employees in
the Philippines, who sells or offers for sale any air
transportation in behalf of said foreign air carrier and/or
other, or negotiate for, or holds itself out by solicitation,
advertisement or otherwise sells, provides, furnishes,
contract, or arranges for such transportation.
5) AIR TAXI OPERATOR means an air carrier utilizing
small aircraft for charter trip and/or individual service
transportation within the territory of the Republic of the
Philippines with proper certification and permit from the
CAB.
CHARTER OF AIRCRAFT – Charter trips are likewise regulated
by the CAB. Charter flight or charter trip means air transportation
performed by an air carrier where the entire capacity of one or
more aircraft, or less than the entire capacity of an aircraft, has
been engaged for the movement of persons and their personnel
baggage or for the movement of property on a time, mileage or
trip basis.
CLASSIFICATION OF CHARTER AIRCRAFT
1) ON ROUTE CHARTER shall refer to service performed
by an air carrier between points which said carrier is
authorized to provide service pursuant to tis CPC and
necessity or foreign air carrier permit. Off-Rout Charter
shall refer to any charter that is not On-route.
2) PRO-RATA CHARTER means a charter the cost of
which is divided among the passengers transported.
3) SINGLE ENTITY CHARTER means a charter the cost of
which is borne by the charterer and not by individual
passengers, directly or indirectly.
4) MIXED CHARTER means a charter the cost of which is
borne, or pursuant to a contract may be borne, partly
by the charter participants and partly by the
charterer.
PUBLIC SERVICE LAW
CERTIFICATE OF PUBLIC CONVENIENCE – is an authorization
issued by the Commission or( the public service regulatory
bodies)for the operation of public services for which no franchise
either municipal or legislative is required.
For example: transportation services, jeepney, hauler trucks. It
is distinguished from a Certificate of Convenience and Necessity
by the requirement that the public utility have to first secure a
municipal or legislative franchise for the operation of the public
service. Example: electric, telephone.
Nature of a Legislative Franchise – in the case of Republic of the
Philippines v. RETELCO 265 SCRA 1 (1996), the Court declared
that a telephone company having a legislative franchise, where
nothing is stated in the franchise, cannot presume that it has an
exclusive right as prior operator over the area. Judicial notice is
taken of the fact that all legislative franchises for the operation of
telephone system contain the provisions that “in the event the
Philippine Government should desire to maintain and operate for
itself the system and enterprise authorized, the grantee shall
surrender his franchise and will turn over to the Government said
system and all serviceable equipment therein, at cost les
reasonable depreciation.”
Under Section of Telecommunications may operate and maintain
wire telephone or radio communications through the Philippines
by utilizing existing facilities in cities, towns and provinces under
such terms and conditions or arrangement with present owners or
operators as may be agreed upon to the satisfaction of all
concerned. The lack of prior negotiations with the existing
telephone system operator does not render illegal the operation
by the Bureau of such telephone system.
NOTICE and HEARING REQUIRED: In the following cases the
powers of the Public Service Commission (PSC) may be exercised
upon previous notice and hearing
1. Issuance of CPC and CPC and N
2. Fixing rates, tolls and charges
3. Setting up of just and reasonable standards
classifications.
4. Issuance of orders requiring public services to establish
and maintain extension of facilities
5. Suspension, revocation, modification of CPC and CPC&N
(Sec. 26, CA 146)
NO NEEED OF NOTICE AND HEARING – the following cases,
the PSC may exercise powers without previous notice and
hearing.
1. Investigate any matter concerning public services
2. Require any public service to furnish safe, adequate and
proper service
3. Appraise and value the property of any public service
4. Grant any public service, special permits to make extra
or special trips
5. Require any public service to properly keep books,
records and accounts; and to make a report on its
finances; and
6. Require public service to comply with laws and
ordinances (Sec. 17)
Distinction between CPC from CPC and N – A CPC is issued
whenever the Commission finds that the operation of the
proposed service will promote public interests in a proper and
suitable manner, for which a C & N is issued upon approval of any
franchise in the judgment of the Commission, such franchise or
privilege will properly conserve the public interest. (CF MICP
Case)
PRIOR OPERATOR RULE – Before permitting a new operator to
invade the territory of another already established with a CPC, the
prior operator must first be given the opportunity to extend its
service in order to meet the needs of the public in the matter of
transportation. Exceptions would be – if public interest would be
better served by the new operator as when the prior operator has
failed, despite, ample time and opportunity given by it by the
Commission, to render adequate, sufficient and satisfactory
service and had violated the important conditions of the
certificate.
PRIOR APPLICANT RULE - where there are various applicants
for a public utility over the same territory, all conditions being
equal, priority in the filing of the application for a CPC becomes an
important factor in granting or refusal of a certificate.
In National Power Co. v. CA, September 26, 1997, the Court
stressed the necessity of a hearing to protect prior operator. In
this case PHIVIDEC Industrial Authority (PIA), was created under
P.D. 538 to carry out the government policy to encourage,
promote and sustain economic and social growth of the country
within a definite industrial area 9PIE-MO), which was within the
12
franchise area of CEPALCO. PIA negotiated with the (National
Power Corporation (NP for the direct supply of power directly to
the pIA are where CEPALCO has a franchise. PIA contends that it
can receive power directly from NPC because it is a public utility,
since PD 538 empowers PIA “as and to be a public utility to
operate and serve the power need within the PIE-MO.
consideration the environmental circumstances of the case, the
conveyance of passengers, trucks and cargoes from Matnog to
Allen is certainly not a ferryboat service but a coastwise or
inter-island shipping service. Under No circumstances can the
sea between Matnog and Allen be considered a continuate of
the highway.

The Supreme Court rules that since PD No. 538 empowers PIA to Pantranco was required to secure a separate CPC for
operate and maintain infrastructure facilities, factory building, the operation of an inter-island coastwise shipping service in
dams resevoirs electric light and power systems necessary or accordance with the provisions of law and that its CPC as a bus
useful in the conduct of industry and commerce or in the transportation cannot be merely amended to include this water
attainment of the purpose and objectives of the Decrees, PIA was service under the guise that it is a mere private ferry service.
held to be authorized to render indirect service to the public by its
administration of the PHIVIDEC Industrial areas, and may
therefore be considered a public utility. Hence, a CPC is not
necessary for it to avail of a direct power connection from the OWNERSHIP OF FACILTIES – The SC clarified in Tatad v.
NPC. However, such authority to be a public utility may not be Garcia Jr. 243 SCRA 436 (1995), that the limit imposed by the
exercised in such a manner as to prejudice the right of existing Constitution on foreign equity applies only to the operation of a
franchises, and cannot be obtained unless due hearing is made public utility and not to ownership of the facilities.
where it is established that the affective private franchise holder
is incapable or unwilling to match the reliability and rates of the CASES IN PUBLIC UTILITIES – CPC AND CPC AND N
NPC.
1) Radio Communications Inc. v. National
That in determining whether a public utility may avail of direct Telecommunications Commission 150 S 450 (distinction
power supply from the NPC, the rule is that direct connection with between franchise and CPC)
NPC cannot be obtained unless due hearing is made where it is 2) Associated Communications & Wireless Service-United
established that the affected franchise holder is incapable or Broadcasting Networks V. NTC G.R.144109 Feb. 17,
unwilling to match the reliability and rates of NPC, in determining 2003.
such issue, NPC is certainly not the proper forum. 3) Divinagracia v. Consolidated Broadcasting System, Inc.
G.R. No. 162272, April 7, 2009.
The determination of which two public utilities has the right to 4) PLDT v. NTC G.R. No. 88404 (PLDT refuses to
supply electric power to an area is not a rate-fixing function which interconnect with other domestic telecommunications
remained with the ERC, since it deals with the regulation of the carriers. SC ruled that PLDT cannot refuse)
distribution of energy resources which under EO 172 was
expressly a function of ERB. However, with the enactment of RA
7638, the Department of Energy took over such function and it is DISTINCTIONS BETWEEN THE CIVIL CODE, CODE OF
not the Department which shall then determine such issue. COMMERCE AND COGSA

1. DILIGENCE REQUIREMENT
In the case of San Pablo vs. Pantranco South Express, Inc., a. Civil Code – Extraordinary Diligence(EOD)
153 SCRA 199 (1987), the facts show that Pantranco is b. Code of Commerce – Ordinary diligence but
engaged in the land transportation business with various CPC modified by the Articles of the Civil Code which
to operate passenger buses from Metro Manila to the Bicol requires them to observe EOD
Region and Eastern Samar. c. COGSA Sec. 3 (1) The carrier shall be bound
before and at the beginning of the voyage to
Pantranco through its counsel, wrote the MARINA requesting exercise due diligence to -
authority to lease/purchase a vessel named M.V Black Double i. Make the ship seaworthy
to be used for its project to operate a ferry boat service for its ii. Properly man, equip and supply the
exclusive use in the ferrying of its passenger buses and cargo ship;
trucks from Matnog, Sorsogon and Allen Samar, that will iii. Make the holds, refrigerating and
provide service to their company buses and freight trucks that cooling chambers, and all other parts
have to cross the San Bernardino Strait. Pantranco contended of the ship in which goods are
that its operation of a ferry service is private in character and carried, fit and safe for reception,
not as a common carrier. San Pablo and Cardinal Shipping carriage and preservation.
Corporation, who are franchise holders of the ferry service in 2. EXCULPATORY CAUSES
this area, interposed their opposition. a. Civil Code - Article 1734
b. Code of Commerce – Article 361 is modified by
ISSUE: The corollary issue is whether a land transportation the provision of the New Civil Code when
company can be authorized to operate a ferry service or applied to common carriers and COGSA in
coastwise or inter-island shipping service along its authorized cases of transportation of goods by water in
route as an incident to its franchise, without the need of filing a foreign trade
separation application for the same. c. COGSA – Section 4(2). There 17 carrier’s
immunities specifically enumerated, all of
The SC took judicial notice of the fact as shown in the which by the terms pf the act must be proved
examination of the map of the Philippines, that Matnog which by the carrier
is on the southern tip of the island of Luzon and within the
provice of Sorsogon is traversed by the San Bernardino Strait
3. BURDEN OF PROOF
which leads towards the Pacific Ocean and does not constitute
a. Civil Code - Article 1735
a small body of water as alleged by Pantranco. Taking into
13
 b. Code of Commerce – same as the Civil Code 3. CAUSE PROXIMA NON REMOTA
c. COGSA – to establish a prima facie case of The immediate, not the remote cause is Spectatur to be
liability against the carrier, shipper has the considered.
burden of proving that the cargo was received
by the carrier in good condition and that cargo USAGE: Use this maxim in conjunction with Article 1739 to 1742
was damaged upon delivery by the carrier at
its destination
. 4. IN JURE NON REMOTA CAUSE, SED PROXIMA
SPECTATUR
4. DURATION OF CARRIER’S LIABILITY
In law, the proximate, and not the remote, Cause is to be
a. Civil Code – Article 1736, 1737 and 1738
regarded
b. Code of Commerce – same
c. COGSA – the term carriage of goods covers the
period from the time when the goods are
loaded to the time when they are discharged USAGE: Use this maxim in conjunction with Article 1739 to 1742
from the ship or from the point of loading to
the point of discharge. 5. JUS PUBLICUM PRIVATORIUM PACTIS MUTARI NON
PROTEST
Public law is not to be superseded by private agreements.
5. STIPULATION LIMITING LIABILITY
a. New Civil Code – Article 1744, 1746, 1751 and
1752 USAGE: Use this maxim in rrelation to stipulations limiting a
b. Code of Commerce – same common carrier’s liability for loss of goods under Articles 1744 to
c. COGSA – per package limitation (Sec. 4(5)) or 1747
freight unit if the Court cannot determine if the
6. LATA CULPA MALA FIDE AEQUIPARATUR
goods are in shipped in packages. The
Gross negligence is equivalent to bad faith.
package limitation will be based on the
customary freight unit which is defined as “the
unit upon which the charge for freight is USAGE: Use this to justify the award of moral damages when the
computed”. Take note, the package limitation
common carrier acted with gross negligence amounting to bad
does not apply if the nature and value of the faith.
goods have been declared by the shipper
before shipment and inserted in the B/L. Such 7. NULLA PACTIONE EFFICI POTEST UT DOLUS
declaration shall be prima facie evidence, but PRAESTETUR
shall not be conclusive on the carrier. By no contract can it be arranged that a man shall be
indemnified against responsibility for his own fraud.

6. PRESCRIPTION OF ACTION
a. Code of Commerce – Article 366/ Statue of USAGE: This maxim may be used also in conjunction with
Limitation under the Civil Code stipulations limiting or exempting a common carrier’s liability for
b. COGSA – three (3) days and one (1) year loss of goods under Article 1744 to 1747.

8. SEMPER PRAESUMUR PRO NEGANTE

LATIN MAXIMS AND TRANSPORTATION LAW The presumption is always in favor of the Negative.

MAXIM and MEANING AND USAGE

1. ABUNDANCE CAUTELA NON NOCET USAGE: Use this maxim to emphasize the presumption of fault or
There is no harm done by great caution negligence in Article 1735.

9. VERBA FORTIUS ACCIPIUNTUR CONTRA PROFERNTEM

USAGE: This maxim can be used to underscore the duty of Words must be construed against those who use them.
common carriers to exercise EOD and the necessity of proving the
exercise of the same to be free from liability in case of loss of
USAGE: Use this in support of arguments to strike down maritime
goods or injury to persons. Article 1733 and 1755 of the Civil
contracts which are considered contracts of adhesion
Code.

2. ACTUS DEI NEMINI FACIT INJURAM

The act of God prejudices no one.

USAGE: Use the maxim in support of arguments exempting

common carriers from liability Article 1734 (1)

14
TRUE

1. A simple or particular average include all the expenses and

damages caused to the vessel or to her cargo which have not
inured to the common benefit and profit of all the persons
interested in the vessel and her cargo.

(Article 809 paragraph 1:As a general rule, simple or

particular averages shall include all the expenses and
damages caused to the vessel or to her cargo which
have not inured to the common benefit and profit of all
the persons interested in the vessel and her cargo)

15
2. The victuals and wages of the crew while the vessel is in
quarantine is considered a simple or particular average.
Article 809, number 7:The victuals and wages of the crew
while the vessel is in quarantine
3. If by reason of a storm or other causes of force majeure, a
vessel which is properly anchored and moored shall collide
with those nearby causing them damages, the injury
occasioned shall be considered as particular average of the
vessel run into .
(Article 809 number 8: The loss inflicted upon the vessel
or cargo by reason of impact or collision with another if
it is accidental or unavoidable)
4. A vessel which, upon being run into sinks immediately as well
as that which, having been obliged to make a port to repair
the damage caused by the collision is lost during the voyage
or is obliged to be stranded in order to be saved , shall be
presumed as lost by reason of collision. (Article 833)
FALSE
1. Arrival under stress is the demolition or shattering of a vessel
caused by her driving ashore or on rocks and shoal in the
mid seas or by violence of waves and winds in tempest. (This
is shipwreck)
2. Where a navigator, suddenly realizing that a collision is
imminent by no fault of his own in confusion and excitement
of the moment does something which contributes to the
collision or omits to do something by which the collision
might be avoided, such act or omission is ordinarily
considered one inscrutable and the ordinary rules of strict
accountability do not apply. (Error in extremis)
3. If a vessel shall collide with another, through the fault,
negligence, or want of skill of the captain, sailing mate or any
other member of the complement, the owner of both vessels
shall indemnify the damages suffered after an expert
appraisal.
(Article 826: If a vessel should collide with another,
through the fault, negligence , or lack of skill of the
captain , sailing mate, or any other member of the
complement, the owner of the vessel at fault shall
indemnify the losses and damages suffered after an
expert appraisal. )
4. It is the duty of the privileged vessel , when approaching
another vessel charged with the obligation of avoiding her ,
to keep her course, to enable the other vessel to keep out of
the way.
5. In case it cannot be determined which of the two vessels has
caused the collision, each one shall suffer her own damage
and each shall be
6. The expenses of an arrival under stress shall always be for
the account of the shipowner or ship agent but they shall not
be liable for the damage which may be caused the shippers
by reason of the arrival provided the latter is lawful . (Article
821, if the arrival is not lawful , the ship- owner or agent has
joint liability)
7. The doctrine of inscrutable fault means that the court can see
that a fault is committed, but is unable, from the conflict of
testimony , or otherwise to locate it. Hence, when it is
impossible to determine to what direct and specific acts the
collision is attributable, it is a case of damage arising from a
cause that is inscrutable.
8. In order to satisfy the amount of the gross or general
average , all the persons having an interest in the vessel and
cargo therein at the time of the occurrence of the average
shall contribute. (Article 812)
9. General averages are caused for the benefit of those
interested in the vessel and her cargo.
10. Salvage is service which one person renders to the owner of
a ship or goods by his own labor , preserving the goods or
ship the owner or those entrusted with the care of them
either abandoned in distress at sea or are unable to protect
and secure.
11. If in the salvage or in the rendering of assistance, different
persons shall have intervened, the reward shall be divided
between them in proportion to the service which each one
may have rendered and in case of doubt , in equal parts.
Liable for the damages occasioned to their cargoes.
(Article 827,both vessels shall be solidarily liable for the
losses and damages occasioned to their cargoes)
12. General averages are born by the owner of the things
damaged. (General averages are borne by all persons having
an interest in the vessel and the cargo therein at the time of
the occurrence of the average)
13. Public service owned or operated by government entities or
government owned or controlled corporations are required a
certificate of public convenience or certificates of public
convenience and necessity and shall be regulated by the
commission in the same way as privately-owned.
14. A certificate of public convenience and necessity is issued
whenever the commission finds that the operation of the
proposed public service will promote the public interests in a
proper and suitable manner for which a municipal or
legislative franchise is not necessary.
(In the issue of a certificate of public convenience and
necessity, a municipal or legislative franchise is
necessary)
15. After the salvage is accomplished , the owner or his
representative shall have a right to the delivery of the vessel
or things saved and the salvor shall have no right to retain
them pending the payment of the salvage reward. (Salvor
has the right to retain the vessel or things)
16. COGSA shall apply to all contracts of carriage of goods by sea
to or from Philippine ports in foreign trade.
17. The crew of the vessel shipwrecked shall have no right to a
reward for salvage or assistance. (Section 8, Salvage Law)
18. The goods loaded on the upper deck of the vessel shall
contribute to the gross average should they be saved; but
there shall be no right to indemnify if they should be lost by
reason of having been jettisoned for common safety. (Article
855 and York-Antwerp Rule)
19. The damage and deteriorations suffered by a vessel and her
cargo by reason of the shipwreck or stranding shall be
individually for the account of the owners, the part which
may be saved belonging to them in the same proportion.
(Article 840)
20. Collision is the impact of two moving vessels.
16
21. Transferee is subsidiarily liable with registered owner and
driver
22. The bill of lading would serve as basis as regards the extent
of the liability of the common
carrier.
23. The validity and enforceability of stipulations limiting the
carrier’s liability is premised on good faith.
24. Under the Code of Commerce, the carrier shall be bound
before and at the beginning of the voyage to exercise due
diligence to make the ship seaworthy.
25. The York-Antwerp Rules allows deck cargo on inter-island
shipping .
26. A captain who may have taken on board the goods saved
from the wreck shall continue his course to the port of
destination, and on arrival shall have a lien over the same
and shall have the right to retain them.
27. A collision is unlawful if the lack of provision arose from the
failure to take necessary provisions for the voyage according
to usage and custom. (Arrival under stress)
28. A difference in the charge for handing and transporting may
only be made when the difference is based upon actual cost .
Actual cost may depend upon quantity.
29. A certificate of public convenience is a requisite for the
incurring of liability under the Civil Code provisions governing
common carriers.
30. The liability of the common carrier to safely transport
passengers and cargo may vary depending on attendant
circumstances .
31. The legal relationship between he consignees and the
arrastre is also based on culpa contractual.
32. The action or recovery of damages arising from collisions
cannot be admitted if a protest or declaration is not present
within 1 year before the competent authority of the point
where the collision took place.
33. The civil liability by the shipowner shall extend to that which
is not covered by the marine insurance proceeds.
34. Abandonment is not necessary in order for the shipowner to
benefit from the limited liability rule.
35. There can be no general average if there was no danger at
all.
36. Deliberate sacrifice is made through the jettison of the cargo
or part of the ship.
37. The freight of cargoes jettisoned for the common safety shall
be considered as general average.
38. There can be general average even if the sacrifice was not
made during the voyage when the sinking of the vessel is
necessary to extinguish a fire in a port, creek or bay.
39. Cargo sold by the captain to pay for the necessary repairs of
the vessel or for unavoidable and urgent needs is required to
pay freightage.
40. Liability of the shipowner in collision is still based on
negligence.
41. In order for a loan on respondentia to be extinguished , the
loss of the collateral should arise only from the accident of
the sea.
42. If the vessel shall be forced by a third vessel to collide with
another , the shipowner of the third vessel shall indemnify
the damages caused, the captain thereof being civilly liable.
43. Insurers of the vessel ,of the freightage , of the cargo shall
be obliged to pay for the indemnification of the particular
average.
44. Lenders on bottomry and respodentia shall not be held liable
for general averages
45. The captain cannot contract a loan on respondentia.
46. Derelict is an act by which members of the crew while the
vessels abandon the vessel.
47. A maritime protest is allowed only for collision.
ESSAY QUESTIONS:
Enumerate at least 5 nautical rules to determine
negligence.
1. When two vessels are about to enter a port, the farther
one must allow the nearer one to enter first; if they
collide, the fault is presumed to be imputable to the one
who arrived later, unless it can be proved there was no
fault on its part.
2. When the 2 vessels meet, the smaller one must give the
right way to the larger one.
3. A vessel leaving the port should leave the way clear for
another which may be entering the same port.
4. The vessel which leaves later is presumed to have
collided against one which has left earlier.
5. There is also a presumption against a vessel which sets
sail at night.
6. The presumption also works against the vessel with
spread sails which collides with another which is at
anchor and cannot move ,even when the crew of the
latter has received word to lift anchor, when there was
not sufficient time to do so or there was fear of a greater
damage or other legitimate reason.
7. The vessel which is not properly moored or does not
observe the proper distances has the presumptions
against itself.
8. The vessel which is not properly moored at a place not
used for the purpose, or which is improperly moored or
does not have sufficient cables, which has been left
without a watch, has also against itself the presumption.
17
 9. The same rule applies to those which do not have buoys
to indicate the location of its anchors to prevent
damages to these vessels which may approach it.
What are the governing Rules in the filing of a maritime
protest
 Article 835. The action for recovery of losses and
damages arising from collisions cannot be admitted if a
protest or declaration is not presented within 24 hours
before the competent authority of the point where the
collision took place, or that of the first port of arrival of
the vessel , if in Philippine territory , and to the consule
of the RP if it occurred in a foreign country.
The purpose of the law is the prevent fictitious claims for damages
resulting from collisions. The said protest may be filed before a
justice of peace .
Non filing of a marine protest may be justified in accordance with
the condition provided in Article 836. It states that:
With respect to damages caused to persons or to the
cargo, absence of protest may not prejudice the persons
interested who were not on board or were not in a
condition to make known their wishes.
Therefore, interested persons who were not in the vessel
as well as those not in a condition to make known their
wishes may file an action for damages arising from
collision even if no marine protest was filed by them.
A maritime protest is required to be made after 24 hours in the
following instances:
a) vessel makes an arrival under stress
b) vessel is shipwrecked
c) Vessel has gone through a hurricane or when the
captain believes that the cargo has suffered damages or
average.
d) maritime collisions
But where the vessel is not a merchant vessel and where a person
who, due to collision, suffered injuries disabling him to make a
protest within the time prescribed, the protest can be made
beyond the 24 hour period.
When the collision took place in the Philippine territory, the
protest shall be made before the competent authority of the point
where the collision took place or that of the first port of arrival of
the vessel.
When the collision took place in a foreign country, the protest can
be made in the consul of the Philippines.
Explain the concept of Salvage
Salvage is essentially an act of saving the vessel, the cargo, or
both.
The relevant law governing salvage is Act No. 2616. Section 1
provides the following:
When in case of shipwreck, the vessel or its cargo shall be beyond
the control of the crew, or shall have been abandoned by them,
and picked up and conveyed to a safe place by other persons, the
latter shall be entitled to a reward for the salvage.
Those who, not being included in the above paragraph, assist in
saving a vessel or its cargo from shipwreck, shall be entitled to a
like reward.
The law provides for a salvage reward to those who engage in the
act of saving the vessel or cargo when the following requisites
are present:
a) There must be a valid object of salvage
b) Such object must have been exposed to marine peril .
c) Salvage service must be voluntary and not arising from
a pre-existing duty.
d) Salvage effort must be successful.
When a vessel is badly damaged and abandoned by the crew to
the mercy of the sea, the salvor must stoke it to the nearest port
where it will be delivered to the nearest municipal treasurer or
collector of customs who will advertise the fact of salvage.
If the owner of the salvaged vessel appears, he may take
possession of the vessel and must pay a reward not exceeding
50% of the value of the vessel.
In the case of Valles v Pijete, the Court held that the salvors
have a right to retain possession of the vessel until the owner
pays the reasonable expenses .
What are the rules on the loading of cargo or container on
deck? (York-Antwerp Rules)
1. Deck cargo is allowed only in domestic or coastwise or
inter-island shipping, and is prohibited in international or
overseas or foreign shipping.
2. If deck cargo is loaded with the consent of the shipper
on overseas trade, it must always contribute to general
average, but should the same be jettisoned, it would not
be entitled to reimbursement because there is a
violation of the York –Antwerp Rule.
3. if deck cargo is loaded with the consent of the shipper in
coastwise shipping, it must always contribute to general
average and if jettisoned would be entitled to
reimbursement.
What is an Error in Extremis
An error in extremis is a wrong which even if committed will not
automatically impute liability to a vessel committing such act.
An example of an error in extremis is the case of Urutia & Co v
Baco River Plantation where a vessel , passing thru the third
zone of collision, changed its course in order to avoid , if possible,
the collision with a steamship. Even if such act was wrong
because the collision still resulted, it was said to have been done
in extremis.
What are the Requisites of General Average?
1. There must be a common danger
2. Part of the vessel or cargo, or both is sacrificed
deliberately for common safety.
3. From the expenses or damages caused follows the
successful saving of the vessel and cargo.
4. The expenses or damages should have been incurred
after taking the legal steps and authority.
What is Arrival Under Stress? (when lawful, when
unlawful)
Arrival under stress is the arrival of the vessel in the nearest and
most convenient port when, during the voyage to the port of
destination, the captain should believe that the vessel cannot
continue due to the following reasons:
a) lack of provisions
b) well founded fear of seizure, privateers, or pirates
c) accident of the sea disabling it to navigate
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In such situations, the captain shall assemble the officers and
summon the persons interested in the cargo who may be present,
and who may attend the meeting without the right to vote. When
the arrival under stress has been agreed upon, the proper
minutes shall be entered which shall be signed by all in the log
book.
Under Article 820, the following are considered unlawful arrivals
under stress:
a) If the lack of provisions should arise from the failure to take
the necessary provisions for the voyage according to usage
and customs, or if they should have been rendered useless or
lost through bad stowage or negligence in their care.
b) If the risk of enemies, privateers or pirates should not have
been known ,manifest, and based on positive and probable
facts.
c) If the defect of the vessel should have arisen from the fact
that it was not repaired , rigged, equipped, and prepared in a
manner suitable for voyage or some erroneous order of the
captain
d) When malice,negligence, want of foresight or lack of skill on
the part of the captain exists in the act causing the damage.
Distinguish Derelict from Desertion
Derelict is an instance when a vessel or cargo is badly damaged
and abandoned by the crew to the mercy of the sea.
Desertion is an act by which a seaman deserts or abandons a ship
in which he has engaged to perform a voyage before the
expiration of his time and without leave . It is the unauthorized
and the seaman has no intention to return to her service. It is
essential for desertion to exist that there must be animo
revertendi .
Distinguish Error in Extremis and Doctrine of Inscrutable
Fault
Under the doctrine of inscrutable fault, there is a certainty that
one vessel is at fault but it cannot be determined who it is
between the colliding vessels. In this case, the liability of both
vessels will be solidary under the provision of Article 827.
Under Error in Extremis, if a vessel, having a right of way,
suddenly changes its course during the third zome to avoid an
imminent collision due to the fault of another vessel, such act may
be said to be done in extremism and even if wrong cannot create
responsibility on the part of the vessel with a right of way.
Effect of non compliance with Articles 813 and 814
The expenses or damage shall not be considered as general
average and shall be treated as particular expenses to be borne
by the owners of the goods which gave rise to the expense or
suffered the damage.
Legal Steps required in General Average
As provided for in Article 813 and 814,the following are the legal
steps to be taken to consider an expense or damage as general
average:
a) There must be a deliberation among the captain, sailing mate
and the other officers of the vessels after hearing the persons
interested in the cargo if the latter are present.
b) After the deliberation, a resolution by the captain to incur the
expenses and cause the damages corresponding to gross
average shall be adopted.
c) If there be oppositions from the persons interested in the
cargo or an opposition from the majority, the expenses or
damages may be executed under the captain’s responsibility
without prejudice to the right of the shippers to proceed
against the captain before the competent judge or Court , if
they can prove that he acted with malice, lack of skill, or
negligence.
d) If the persons interested in the cargo are present but have
not been hear, they shall not contribute to the general
average and the same shall be chargeable against the
captain except when the urgency of the case is such that the
time necessary for the previous deliberations was wanting.
e) The resolution must be entered in the log book,, stating the
reasons and motives for the dissent and the irresistible and
urgent causes which impelled the captain if he acted of his
own accord.
f) The minutes If the act is initiated by the captain of his own
accord, it shall be signed by him and the officers.
g) The minutes shall state all the goods jettisoned and the
injuries caused to those kept on board.
h) The captain shall deliver one copy of there minutes to the
maritime judicial authority of the firs port the may make
within 24 hours after his arrival and to ratify it immediately
under oath.
i) Collision and liabilities
When the collision is due to the fault, negligence or lack of skill of
the captain, sailing mate or any other member of the compliment
of the vessel, the owner of the vessel at fault shall be liable for
the losses and damages.
If the collision is due to the fault of both vessels, each vessel shall
suffer its own losses , but as regards to the owner of the cargoes,
both vessels shall be jointly and severally liable.
If it cannot determined which of the two vessels is at fault, the
rule for collisions when the two vessels are at fault shall be
applied.
If the vessels collide with each other through force majeure , each
vessel and each cargo shall bear its own damages.
If the collision is through the fault of a third vessel, the owner of
the third vessel shall be liable for the losses and damages.
If a vessel properly moored and anchored collides with another
vessel by reason of force majeure, the vessel run into shall suffer
its own damages and expenses.
When is a maritime protest required?
a) Article 612, Arrival Under Stress
b) Where the vessel is shipwrecked
c) Where the vessel has gone through a hurricane or when the
captain believes that the cargo has suffered damages or
averages
d) Maritime collisions
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